Warner Bros. and New Line have been hit with a copyright lawsuit seeking to block production of sequels to their hit horror film The Conjuring, reports Variety.
According to the site, the suit, filed Friday by Evergreen Media Group and Tony Derosa-Grund in federal court in Houston, alleges theft of the underlying rights to the case files of real-life paranormal investigators Ed and Lorraine Warren.
For its part, Warner said that the suit is “improper” and noted that New Line filed a claim against Evergreen last year over rights to a “Conjuring” TV series that has gone to arbitration.
“New Line has been and is vigorously defending itself against these spurious claims in a binding arbitration proceeding in Los Angeles, and therefore the Texas filing is both procedurally and substantively improper,” the studio said.
New Line has set its Conjuring sequel for a pre-Halloween release on Oct. 23, 2015, with Patrick Wilson and Vera Farmiga returning to star. The yet-to-be titled sequel does not have a director yet.
Evergreen Media said in the new suit that New Line was only granted rights on less than 1% of the case files of the Warrens’ stories in exchange for a purchase price for each theatrical production as well as a crediting and employing DeRosa-Grund as producer.
“Plaintiffs and New Line successfully developed and produced a hit theatrical motion picture entitled ‘The Conjuring’ based on one of the selected case files,” the suit said. “Defendants, however, now seek to reap all of the profits from ‘The Conjuring’ while denying their financial obligations and failing to pay any profits to Plaintiffs.”
“New Line has acted in bad faith and breached its agreement with Plaintiffs by, among other things, failing to pay for the underlying rights and stealing those rights to make additional films, both theatrical films covered by the agreements as well as direct-to-video films that are not covered by the agreements, without compensating Plaintiffs or including Mr. DeRose-Grund as producer.”
The suit also alleged that Warner and New Line have refused to pay Evergreen the 5% profit participation that it’s due for “The Conjuring” under the producer agreement.
Additionally, the suit asserts that because of the dispute over the TV rights, Lionsgate has withdrawn from a proposed “Conjuring TV” series with Evergreen.
“As a direct consequence of Defendants’ deliberate actions and interference, Evergreen is unable to collect the compensation owed under its agreement with Lionsgate and has suffered monetary damages that reach well into the millions of dollars,” it said.
The lawsuit alleges that Warner Bros. has committed a breach of contract, a breach of the implied covenant of good faith and fair dealing, tortious interference, fraud in the inducement, promissory estoppel and conversion. The plaintiffs are seeking damages including the studio’s profits and revenue.